Backdoor Roth 2021 TurboTax forms (2024)

Could use some help with TurboTax for backdoor Roths.

In 2021, both my spouse and I performed two backdoor Roths. In March 2021, we did the backdoor Roth for the 2020 contributions and in December 2021, we did the backdoor Roth for the 2021 contributions. How do we make sure this all works out in TurboTax such that we don't have to pay taxes on the conversion? All contributions were with after tax funds, and we have no balances in Traditional IRA for pro rata. Trad IRA balances were $0 at beginning of 2021 and are $0 now. The Roth conversion happened soon after the contributions such that maximum gain was 1 cent at most.

https://ttlc.intuit.com/community/enter ... n/00/25567

Here you go: https://thefinancebuff.com/how-to-repor ... botax.html

nolesrule wrote: ↑Thu Feb 10, 2022 10:13 amThe 2020 contributions made in 2021 should have been reported on a 2020 Form 8606 filed with your 2020 tax return. This reported the basis, which would carry over to 2021. If you did this in TurboTax it should know to carry over the basis from the 2020 return.

What?? I didn't get a tax form from Vanguard for the 2020 contributions/conversion done in 2021 until now. Filed 2020 tax return a month before I contributed to the 2020 Traditional IRA and Roth Conversion. This seems extremely onerous. Just don't want to pay taxes on something I've already paid taxes on.

Although I may have filled out the form "correctly" inadvertently to get TurboTax to calculate $0 basis for 2020.

OldSport wrote: ↑Thu Feb 10, 2022 10:40 am

nolesrule wrote: ↑Thu Feb 10, 2022 10:13 amThe 2020 contributions made in 2021 should have been reported on a 2020 Form 8606 filed with your 2020 tax return. This reported the basis, which would carry over to 2021. If you did this in TurboTax it should know to carry over the basis from the 2020 return.

What?? I didn't get a tax form from Vanguard for the 2020 contributions/conversion done in 2021 until now. Filed 2020 tax return a month before I contributed to the 2020 Traditional IRA and Roth Conversion. This seems extremely onerous. Just don't want to pay taxes on something I've already paid taxes on.

Although I may have filled out the form "correctly" inadvertently to get TurboTax to calculate $0 basis for 2020.

Form 5498 shows contributions but it's usually not issued until May.

There isn't a form that you would import to TurboTax to inform it of contributions. You just have to go through the section on IRA contributions and answer the questions correctly.

1099-R is only for distributions from a retirement account (conversions to Roth are distributions).

You won't pay taxes if you fill out the forms correctly. The basis reported from your 2020 Form 8606 Line 14 needs to go on Line 2 of the 2021 Form 8606. If there was no 2020 Form 8606 then you need to file one.

There should not be zero basis for 2020. You made a non-deductible contribution in March 2021 for 2020so the 2020 basis would be the amount of the contribution.

nolesrule wrote: ↑Thu Feb 10, 2022 11:02 am

OldSport wrote: ↑Thu Feb 10, 2022 10:40 am

nolesrule wrote: ↑Thu Feb 10, 2022 10:13 amThe 2020 contributions made in 2021 should have been reported on a 2020 Form 8606 filed with your 2020 tax return. This reported the basis, which would carry over to 2021. If you did this in TurboTax it should know to carry over the basis from the 2020 return.

What?? I didn't get a tax form from Vanguard for the 2020 contributions/conversion done in 2021 until now. Filed 2020 tax return a month before I contributed to the 2020 Traditional IRA and Roth Conversion. This seems extremely onerous. Just don't want to pay taxes on something I've already paid taxes on.

Although I may have filled out the form "correctly" inadvertently to get TurboTax to calculate $0 basis for 2020.

Form 5498 shows contributions but it's usually not issued until May.

There isn't a form that you would import to TurboTax to inform it of contributions. You just have to go through the section on IRA contributions and answer the questions correctly.

1099-R is only for distributions from a retirement account (conversions to Roth are distributions).

You won't pay taxes if you fill out the forms correctly. The basis reported from your 2020 Form 8606 Line 14 needs to go on Line 2 of the 2021 Form 8606. If there was no 2020 Form 8606 then you need to file one.

There should not be zero basis for 2020. You made a non-deductible contribution in March 2021 for 2020so the 2020 basis would be the amount of the contribution.

I've been doing the backdoor Roth for the prior year in March for the past several years, so I've had to put a nonzero basis to get the TurboTax numbers to work out correctly to not calculate a tax. So I think I filled it out the way you said but when I initially follow the TurboTax prompts as they state, TurboTax tries to double tax me, so I change it to fill it out as you state and the numbers work out. I guess I correctly had a nonzero basis all this time, was filling it it "correctly" to get the numbers to work but didn't realize it at the time.

From now on if still allowed to do backdoor roths, will do the contribution for the current year in the current year with a quick conversion.

OldSport wrote: ↑Thu Feb 10, 2022 10:40 am

nolesrule wrote: ↑Thu Feb 10, 2022 10:13 amThe 2020 contributions made in 2021 should have been reported on a 2020 Form 8606 filed with your 2020 tax return. This reported the basis, which would carry over to 2021. If you did this in TurboTax it should know to carry over the basis from the 2020 return.

What?? I didn't get a tax form from Vanguard for the 2020 contributions/conversion done in 2021 until now. Filed 2020 tax return a month before I contributed to the 2020 Traditional IRA and Roth Conversion. This seems extremely onerous. Just don't want to pay taxes on something I've already paid taxes on.

Although I may have filled out the form "correctly" inadvertently to get TurboTax to calculate $0 basis for 2020.

Telling the IRS you made a non-deductible contribution is your job. This is how you avoid paying taxes a second time. Vanguard has nothing to do with that...they don't know if a contribution is deductible or not.

If the contribution was for 2020 and you did not do the form, you can do it now. Download a 2020 form from the internet, fill it in by hand (lines 1, 3 and 14), sign it and send it to the IRS.

Line 14 from that first form will flow onto line 2 of the 2021 form. Since you didn't do the form in 2020 you will have to force that number onto line 2 of the 2021 form because TT does not know it happened.

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